Consunji sees power situation to be most challenging next year

MANILA, Philippines — Tycoon Isidro Consunji, chairman and chief executive officer of integrated energy company Semirara Mining and Power Corp. (SMPC), said Luzon’s power situation could be faced with back-to-back challenges in the next two years, with 2023 being the “most challenging.”

Consunji said next year’s challenge could be tight margin between demand and supply, and potentially higher prices the year after.

“I think 2023 is the most challenging, more than 2024 because in 2023, the LNG is not ready. So, next year, there may not be enough (supply),” Consunji said.

He said that should a power plant conk out in the middle of summer of next year, it may lead to potential brownout.

“For 2024, it (LNG) is ready, so there will be no brownout, but it may be more expensive. I think 2024 is not so challenging because the LNG is there already. The issue is price,” Consunji said.

Consunji said LNG price is probably 50 percent higher than coal.

“So, we will have power, but it’s going to be more expensive than today, that’s the problem,” he said.

For next year, Energy Secretary Raphael Lotilla is projecting a “difficult” first half in terms of the power situation.

He said the difficult period is when the hot months come in, which is why the country will need every source of power in order to bridge that period.

The agency previously said delays in some liquefied natural gas (LNG) projects, as well as the inability of Malampaya to produce more gas would likely have an impact on the country’s summer supply.

“Our foremost concern is to ensure that there is enough capacity supplied through various sources, most especially in the coming summer months to sustain the power supply in the country,” Lotilla said.

Two natural gas projects in Luzon are slated for commissioning by the first quarter of 2023 to help stabilize power supply.

Commissioning of Linseed Field Power Corp. and AG&P’s integrated LNG import terminal in Batangas City is targeted by March next year, while commercial operation is eyed in April.

FGEN LNG Corp., a subsidiary of First Gen Corp., with BW LNG providing LNG storage and regasification services, is also scheduled for the commissioning of its LNG terminal in March 2023, with commercial operation of the terminal set in June.

Last week, the Luzon grid was already placed on yellow alert status due to forced outages of several power plants.

A yellow alert means power reserves are not enough to cover the largest running generating unit at the time, but it won’t necessarily lead to outages.

Red alert, on the other hand, is placed over the grid when the supply to demand balance further worsens, which can lead to rotating power interruptions.

In a scenario with forced outage and without output from the Ilijan power plant, the DOE’s Electric Power Industry Management Bureau has projected that there will be an occurrence of 17 yellow alerts and three red alerts for next year.

The red alerts are seen to occur in May and June as capacity will fall below required regulating reserve.

Yellow alerts, meanwhile, are seen occurring from February to June, and from October to early December next year.